Brand Management
Lecture 1
Introduction
Why did McDonalds change their logo? It costs them billions of dollars to
make this work. Because colors have meaning, e.g. red and yellow stand
for cheap, while green stands for relax and time for yourself. The color
already gives you meaning. Will McDonalds have the image that they are
ecofriendly? Probably it won’t change a big thing because they are already
here for decades, perhaps in the next generation.
For instance grey means balance, green means health and peaceful.
There is a reason why insurance companies have a big building. The
building is strong, and therefore it gives the perception that the company
is strong and will last. Also the example of a young professor that is
teaching, he lacks grey hair and the perception that he has not enough
experience/knowledge.
How do I get a buyer to prefer and buy my ‘commodity’?
ANSWER: Differentiate it from competition and make it more attractive Preferably with a different product
or product attribute, what makes the proposition.
HOW: By branding your ‘commodity’. You’ve to convince people that the small difference is really
important to them. Be at least different on one attribute/property.
Brand management in a nutshell
Before branding came in nobody cared about the producer (chairs, bread, sugar).
Origins of branding:
- Derived from old Norse word ‘brandr’ meaning ‘to burn’
- Marks on Chinese porcelain, pottery jars from Roman and Indian artifacts dating from 1300 BC
- Cattle Ranchers
- Bakers to mark their bread - English law in 1266
- The Moon & the Stars (1851) – P&G brand
- Uneeda biscuits – 1898 – first nationally branded biscuit
Cattle rangers caught a cow and burned a mark on it, the same goes for Chinese or Roman pottery. Other people
will know that is yours. One of the first logo’s was from Proctor & Gamble (stars and the moon). It was very
imaginative, something far away, to believe in. Besides that pictures are easier to remember. Many people were
not able to read, but could recognize a logo and therefore see the difference with other brands.
What is a brand?
Brand = “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods
and services of one seller or group of sellers and to differentiate them from those of competition” (AMA)
, In practice, even more: … a brand creates a certain amount of awareness (we are there), reputation (where
it stands for), prominence, and so on … in the marketplace Brands also differentiate and might show that
you can afford it, express yourself.
Brand Management Perspective
Brand from the organizations’ point of view: – physical product
Brand from the customers’ point of view: – psychological product Main focus of this course
The physical product is the actual product. Companies are trying to sell their product and need to think of their
intention to pose in the mind of the customer (= brand identity). It is more about sending a message, while
branding is perceiving or comparing a message. Customers use different concepts / words than companies.
Companies think in attributes (e.g. color, weight) which will be sent to the customer. Customers use different
ID’s, e.g. is it easy to hold? How far can it reach? Note the difference between what the product has and what a
customer wants. There must be a fit between these perspectives.
Branding philosophy
Brands <-> Products
Product = “anything that can be offered to a market for attention, acquisition, use, or consumption that might
satisfy a need or want” (Kotler)
A company has to understand the benefits and costs (not only financial) for customers. Even when they have the
best / superior products. If the fit isn’t right, they will not be the most successful.
4 levels (Levitt):
core benefit; Physical product = what’s it about? (e.g. a snack, perfume)
tangible product; Design, Packaging (extremely important for perfumes)
augmented product; More about reliability, e.g. guarantees, warranty, aftersales
total product Outer layer = extra meaning that the customer gives to the product
Example: Everything in the first levels can be okay, but if the image (belongs to the total product) is not good it
can form a problem. Lonsdale has a problem with their image since skinheads began to wear the brand.
, Product Brand
• Tangible: can be touched by customer • Intangible: lives in customer’s mind
• Can be copied • Unique
• Can be outdated • Potentially timeless (can evolve over time)
• Involves transactions • Forms basis of connections (connection with a
customer, but also associations)
Why are brands important? Brands are buyable, e.g. V&D, Perry Sports, BEN. Before stock market values mainly
consisted of tangible assets (buildings, machines), but nowadays the intangible assets are more important. In
1975 about 83% of the stock market value was represented by tangible assets, in 20xx it was only 20%. Brands
are intangible, but what is that? Brands consists of associations that have been learned, see a brand map. Some
are learned by everyone (collective associations), while others are individual (a memory from YOUR childhood).
Brands <-> Products (continued) - Pepsi & Coca Cola Research
Diet Coke vs Diet Pepsi Blind Taste test Diet Coke vs. Diet Pepsi in Identified Taste Test (brand names revealed)
- Prefer Pepsi Sample 51% - Prefer Pepsi Sample 23%
- Prefer Coke 44% - Prefer Coke 65%
- No Preference 5% - No Preference 12%.
Participants had to taste Coca Cola and Pepsi when being blindfolded. The majority of the people drunk Coca Cola
(indicated by the second stats), but preferred the taste of Pepsi, which can be seen in the first stats.
Coca Cola then made the big mistake to change the original recipe which even resulted in protest marches. Why
people protested against the change? The brand Coca Cola is ‘not owned’ anymore by Coca Cola but by the
American society. ‘You changed my brand, my history, my culture’. When blindfolded people prefer extremes, but
when you’re not blindfolded your preferences change to normal since you have more stimuli.
Brands <-> Products (continued)
A brand is a product, but one that adds other dimensions that differentiate it in some way from other products
designed to satisfy the same need
These differences can be:
- rational and tangible
- symbolic, emotional and intangible
Almost all products have on top of their tangible attributes a symbolic meaning, which might be even more
important. For example perfume, cars, clothing brands etc. = edit value.
Reality
The reality is that most valuable assets that many firms have may not be tangible assets, but intangible assets
(management skills, marketing, financial and operations expertise and most important, the brands themselves)
Keep in mind: a brand is a valued (in)tangible asset that needs to be handled carefully.
Example: Westflatern XII is extremely rare and is mostly not sold in shops. It is very exclusive since you need to
buy it at the monastery near the border of France, 2 crates at most. If this beer brand will be sold in the local
beer shops it will lose it exclusivity and therefore it will be less valued. ‘
